Risk1Y Return#111
Days Inventory Outstanding captures the financial stress or solvency profile of the business.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
(Current Price - Price 1 Year Ago) / Price 1 Year Ago x 100
Description
The percentage change in stock price over the trailing twelve months. While value investors focus on fundamentals, price momentum can confirm or refute whether the market is beginning to recognize underlying value. Stocks that combine strong fundamentals with improving price momentum often outperform.
Interpretation
Positive returns combined with high VM Scores suggest the market is recognizing value. Negative returns with strong fundamentals may signal a buying opportunity (mean reversion). Persistently negative returns despite apparently good fundamentals warrant deeper investigation into what the market is pricing in.
Related metrics: Beta (Market Sensitivity), 52-Week Price Volatility, Maximum Drawdown 1Y (Max Drawdown). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Days Inventory Outstanding (DIO)- Primary source filings used to calculate Days Inventory Outstanding (DIO).
FAQ
How is Days Inventory Outstanding calculated?+
Days Inventory Outstanding uses the formula: (Current Price - Price 1 Year Ago) / Price 1 Year Ago x 100. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR balance-sheet + cash-flow statements.
What is a good Days Inventory Outstanding value by sector?+
There is no single 'good' value for Days Inventory Outstanding — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Days Inventory Outstanding on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Days Inventory Outstanding?+
Howard Marks, Seth Klarman, Bill Ackman in distressed scenarios cite Days Inventory Outstanding as a key input to to flag solvency stress and avoid permanent capital loss. The academic anchor is Altman (1968) Z-Score and Piotroski (2000) F-Score. ValueMarkers weights this within the Risk pillar of the VMCI score (8% of total).
What are the limitations of Days Inventory Outstanding?+
Days Inventory Outstanding can mislead in asset-heavy industries where leverage ratios understate true risk. Pair Days Inventory Outstanding with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Days Inventory Outstanding data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Days Inventory Outstanding data, sector percentiles, and the VMCI composite score that integrates Days Inventory Outstanding with 119 other indicators across 100,000+ stocks. The free /screener exposes Days Inventory Outstanding as a filterable column.
Related Risk Indicators
Beta (Market Sensitivity)GM Trend
Beta is the metric used to the financial stress or solvency profile of the business.
52-Week Price VolatilityNM Trend
52-Week Price Volatility measures the financial stress or solvency profile of the business.
Maximum Drawdown 1Y (Max Drawdown)ROIC Min 5Y
Maximum Drawdown 1Y expresses the financial stress or solvency profile of the business.
Free Cash Flow to Enterprise (FCF to Firm)EQ
Free Cash Flow to Enterprise captures the financial stress or solvency profile of the business.
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